Toyota Motor Corp. (TM) continues to play a pivotal role in the global market for fuel-efficient and environment-friendly vehicles. It also expects to benefit from its cost reduction measures and continued focus on the emerging markets.
However, the company reported a 30.5% drop in profits to Y283.56 billion ($3.7 billion) or Y90.20 ($1.17) per share, and a 2% dip in revenues to ?18.58 trillion ($241.59 billion) in fiscal 2012. For fiscal 2013, it expects higher consolidated revenues of Y22.00 trillion, operating income of ?1.00 trillion yen and profits of Y760.0 billion, compared with fiscal 2012.
Therefore, we have upgraded our recommendation on shares of the company to Outperform from Neutral and set a target price of $93.00. This amounts to 14.4X our 2013 EPS estimate, and reflects our upgraded recommendation.
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